We survey the recent economic literature on patent systems. A recent trend in the literature has been a law and economics approach presuming that (1) intellectual property is a balance between short term dead weight loss and long term investment incentive and (2) firms behave strategically within an IP system. We review the patent system (utility standard, service inventions, research exemption) and practice of patents (licenses, infringement suits). We also review the sequential innovation or cumulative innovation framework used for many of the analysis and the unavoidable tension between IP and competition law.
